Optimistic Ops Predict Sub Growth

4/14/2006 8:00 PM Eastern

By: By Mike Farrell

Atlanta— Cablevision Systems Corp. chief financial officer Michael Huseby said the industry is at an inflection point and could begin showing across-the-board basic-subscriber growth soon, hopefully erasing fears that cable is losing the fight for customers from satellite and telephone-company competitors.

Huseby, whose Bethpage, N.Y.-based cable company has some of the highest subscriber growth in the industry — about 2% in 2005 — said that kind of growth could become commonplace in the next few years.

Huseby said that Cablevision has had seven consecutive quarters of growth in basic subscribers.

Huseby pointed to continued strong growth in new services — Cablevision’s voice penetration, at 16%, is the highest among operators and the company is adding customers at a rate of 1% of homes passed per month.

Huseby added that many pundits expected high-speed Internet service several years ago to plateau at 12% to 13% penetration. Cablevision had 38% high-speed data penetration of homes passed at the end of 2005 and 50% of homes with personal computers.

Huseby declined to comment on the $3 billion ($10 per share) special dividend Cablevision will pay to shareholders on April 24. Citigroup cable analyst Jason Bazinet has speculated that the dividend could be another way for the Dolan family, which owns the majority of Cablevision’s voting shares, to attempt to take the company private again. The Dolans — led by Cablevision founder and chairman Charles Dolan and his son, CEO James Dolan — tried to take Cablevision private in June with a $7.9 billion proposal. That offer was withdrawn in December.